Clinic Owner Convicted for $52M Health Care Fraud, Illegal Narcotics Distribution, and Kickback Scheme

A federal jury in the Eastern District of New York convicted a New York man for his role in conspiracies to commit health care fraud, illegally distribute Suboxone, and pay and receive illegal health care kickbacks.

According to court documents and evidence presented at trial, Tony Brown-Arkah, 78, of New York, New York, was the owner of American Medical Centers (AMC), a medical clinic in Brooklyn that purported to provide substance abuse treatment. AMC lured patients to the clinic by illegally prescribing them Suboxone, a Schedule III narcotic designed to treat opioid use disorder, which, as one witness testified, is commonly abused by prison inmates by boiling the medication and dripping it into users' eyes. Brown-Arkah allowed a drug ring to proliferate inside and on the steps of his clinic where drug dealers offered to buy patients' Suboxone prescriptions for cash. One witness testified that an AMC staff member directed him to a van outside where he could sell his Suboxone if he did not want it.

Many patients at Brown-Arkah's clinic received prescriptions signed by a nurse practitioner who lived in Florida and did not see or speak with the patients. When they visited AMC, patients were met with a façade of substance abuse treatment and were required to undergo invasive, medically unnecessary testing in order to get Suboxone prescriptions. Brown-Arkah billed Medicare and Medicaid for services that were never provided, including office visits where Brown-Arkah, who was not a medical provider, was the only AMC staff person to meet with the patient. The evidence established that patients at AMC were frequently prescribed Suboxone when they were not taking the medication. Witnesses testified that these prescriptions were not medically necessary and can be dangerous, and that the lack of Suboxone in a patient's laboratory results is a significant warning sign of illegal diversion.

To fuel his scheme, Brown-Arkah paid illegal cash kickbacks to patients. One of these illegal payments was caught on video, depicted below, by a confidential source. In this undercover recording, Brown-Arkah describes others who pay patients illegal kickbacks and bill for medically unnecessary services, saying "that's why they go to jail . . . that's when the government busts 'em!"

Brown-Arkah funneled patients to receive medically unnecessary laboratory testing. He received thousands of dollars each month in illegal kickbacks from the laboratory in exchange for these referrals. To conceal the kickbacks, the defendant created a shell company and a sham contract and lied to law enforcement about the purpose of the payments. In total, Brown-Arkah and his co-conspirators caused over $52 million in false claims to Medicare and Medicaid.

The jury convicted Brown-Arkah of conspiracy to commit health care fraud, 12 counts of health care fraud, conspiracy to illegally distribute narcotics, 3 counts of illegal distribution of narcotics, conspiracy to pay and receive kickbacks and to defraud the United States, and 2 counts of receipt of kickbacks. A sentencing date has not been set. He faces a maximum penalty of ten years in prison on each health care fraud, narcotics, and kickbacks conviction, and five years in prison on the conspiracy to pay and receive kickbacks and defraud the United States conviction. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division; U.S. Attorney Joseph Nocella, Jr. for the Eastern District of New York; Special Agent in Charge Frank A. Tarentino III for the Drug Enforcement Administration (DEA), New York Division; Assistant Special Agent in Charge Naomi Gruchacz for the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); Acting Special Agent in Charge Michael Alfonso for Homeland Security Investigations, New York (HSI); and Special Agent in Charge Harry T. Chavis, Jr. for the Internal Revenue Service Criminal Investigation, New York (IRS-CI) made the announcement.

The DEA, HHS-OIG, HSI, and IRS-CI investigated the case. The New York City Police Department and the New York City Human Resources Administration assisted in the investigation.

Trial Attorneys Miriam Glaser Dauermann and Margaret Mortimer of the Criminal Division's Fraud Section prosecuted the case.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

The Department of Justice's Health Care Fraud Strike Force Program, currently comprised of nine strike forces operating in federal districts across the country, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion since 2007. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.